October 20, 2015

Kiddie roots kill McDonald's and Burger King in age of foodie-ism; Wendy's left standing

For the better part of a decade, the former fast food giants McDonald's and Burger King have been losing business in the US, and have been subject to one desperate makeover campaign after another. Of the three burger giants, only Wendy's has been rising or holding steady. Why the exception?

Each generation that makes up the bulk of the customer base will reshape the fast food sector to its liking. Baby Boomers were buying fast food mostly for convenience -- for themselves during lunch break, and to avoid having to cook dinner for their children. It was part of their greater emphasis on career striving: less time cooking = more time billing.

But ever since Gen X-ers and Millennials came to spend most of the fast food dollars, the prevailing values have come from foodie one-upsmanship. It's part of the lifestyle striving of the generations for whom the path of career striving would lead to an already saturated niche of competition. They compete for status in the lifestyle arena instead.

The problem for McDonald's and Burger King in this new foodie-oriented climate is quite simply that they are saddled with a kiddie image in the personal memories of the target audience, which prevents them from being taken seriously as foodie-friendly restaurants.

McDonald's has had a children's clown as their mascot since the 1960s, not to mention all the other cartoony characters that have been added to their brand image over the years. Then there are the distinctly kid-focused Happy Meals, on-site playgrounds, kids' birthday parties (at least back in the '80s), and so on and so forth.

Burger King began marketing to children a little later, with the BK Kids Club that began around 1990, playgrounds, kids meals, cardboard crowns for kids to wear, etc.

Wendy's is the only one of the original corporate chains not to have lowered themselves to pandering to children. They offer kids meals, but they don't suffer from brand recognition the way that every Gen X-er and Millennial can remember the shape of the Happy Meal box with the arches on the handle, or the look and assembly of the BK cardboard crown. Wendy's never offered playgrounds, cartoon character mascots, or primary-color decor.

Not that Wendy's was branded as a sophisticated adult restaurant, but it was always meant to look and feel like a place for basically mature people, whether or not they brought children along with them. It didn't feel hostile toward children in the way that other decadent foodie places feel that cater to childless strivers, only that children weren't the focus of attention.

If you think back to childhood memories of the big three, you probably don't remember too much that was exciting about Wendy's, while McDonald's and Burger King light up all kinds of kiddie connotations.

Newly founded foodie places like Chipotle and Starbucks began with a blank slate for their branding, and were shaped by lifestyle striver values from the get-go. Wendy's may not have been a blank slate, but it was pretty close. It never really did conduct intense branding campaigns. All they had to overcome was the image of the avuncular founder Dave Thomas. But some soft-spoken guy from the Midwest already looked like his generation was leaving the stage, and his daughter would take over the family business. Enter the redhead chick playing Wendy in commercials, all grown up now to convince X-ers and Millennials that Wendy's has entered its hipper and younger foodie-friendly stage of life.

Somehow, going from an older and more sober image to a younger and more irreverent image is easier than transforming a kiddie image into a grown-up one. Perhaps it's the boundary between childhood and adolescence that makes the attempted re-launch of McDonald's and Burger King seem like such an unconvincing quantum leap.

We keep hearing all kinds of managerial hocus-pocus about being "nimble" and "agile" in the marketplace. It means shape-shifting from one clearly delineated image to another, as soon as the ground shifts just an inch.

Back on Planet Earth, that strategy takes the form of one desperate and unconvincing makeover after another -- McDonald's as purveyors of super-sized fries, then as multiculti global awareness ambassadors, then where the homos and homo-enablers sip their McCafe, and who knows what next. With Burger King's changing image -- from the BK Kids Club, to the CollegeHumor.com mascot of The King, to the caterers of the schlub army who are going to order junk food LIKE A MAN, to the neo-Midcentury Modern decor -- their agility has flushed the company right down the toilet.

Wendy's had a stable, nondescript brand for its first four decades, and subtly and seamlessly slipped into a fast casual image. It is now the only success story of the original burger chains in the age of the fickle foodie crowd, and it hardly did poor business during the earlier years when its competitors were nimbly shifting from one image into another. Wendy's was guided more by an attitude of stewardship and is winning the long game, while its spastic and agile rivals cashed in on the child-pandering craze of the '80s and '90s but have been doomed to struggling just to do the same level of American business as last year. Their only cushion is growth in the third world, where McDonald's carries prestige over tainted street food.

And should the market shift away from foodie-ism and back toward unpretentiousness, Wendy's could easily reverse the changes they've made, since they are not drastic or pervasive. Its menu is still limited and ordinary -- and timeless -- with trendy foodie-oriented items only coming through on a rotating basis, unlike the steady bloating of the menu at McDonald's with premium and niche items.

McDonald's and Burger King are allowing short-term opportunists to run the company into the ground with their protean agility, while steward-guided Wendy's will still be thriving for decades to come.

"McDonald's and Burger King are allowing short-term opportunists to run the company into the ground with their protean agility,"

I wonder how much of that short-term opportunism is also caused by life-style striving. If you're not serious about advancing your career or gaining prestige through it, there's less incentive to make a good company, more incentive to get hard cold cash to buy new products and go on vacations.

McDonald's also went all-in on what I'll euphemistically call "minority outreach", as Paul Kersey has documented at SBPDL. The whole "I'm lovin' it" campaign was all about that. Here in the city the franchises are unfailingly staffed by obese, sub-literate vibrant yoofs, delivering customer service with all the warmth and efficiency of the US Post Office. I always do a double-take when I head up to Wisconsin and stop at a Culvers, to see a fast food place staffed by cute white high school girls instead of surly dindus.

Over 10 years later, "I'm lovin' it" has never stopped sounding retarded. If they were going to freeze a slogan in time, it should've been "It's a good time for the great taste of McDonald's". Here's a nearly all-white ad from 1984 with a Footloose-inspired jingle:

https://www.youtube.com/watch?v=dFTlYHIPeJI

Wendy's iconic ad campaign from the '80s is still known, despite it featuring a cranky senior citizen rather than hip young kids. "Where's the beef?" They weren't even trying to pander to teenagers or young adults back then.

It's damning of the vibrant-outreach approach that nobody really likes anyone from McDonald's multiculti ads. Which ones specifically stand out as likable? None. They're only there as symbols to tell the white liberal audience that McDonald's shares their worldview.

(Blacks, Mexicans, etc., aren't moved by ads and just eat there because it's the cheapest and most ubiquitous. Minorities actually hate the homo-enabler kind of ads, showing that the campaigns are primarily directed as cultureless whites.)

In contrast, most of the audience likes the wholesome Alabama white girl from the Wendy's campaign.

Another sign of the juvenile baggage of the big two are their kiddie nicknames, which have been widespread for a long time -- Mickey D's and BK.

There's no such nickname for Wendy's, nor an ironic French pronunciation like Tar-zhay.

Wendy's always focused on the quality of the food itself (fresh all-beef patties, never frozen), whereas McDonald's and Burger King tried to appeal to lifestyle strivers through its brand image (multiculti, frat dude, schlubbo, etc.). That made it a natural transition to foodie-ism, while the other two only have empty advertising to disguise their pink-slime patties and non-existent strips of bacon on bacon cheeseburgers.

McDonalds' pricing is unusual in that there's a price gap between value menu sandwiches at $1-$2 and sandwiches ordered off the numbered combos section which run $5-$7 if you order the sandwich only (with an added $2 - $3 if you go for the combo). Fast-food leaves a bad enough taste in your mouth without the added knowledge that you just spent close to $10 on a single combo meal that didn't even include a shake/ desserts/ upgrades. Eating fast-food is a conscious decision of sacrifice of health/flavor for price/speed/convenience. Reclassifying price as a positive to a negative factor upsets the balance, and now you're sacrificing on price *in addition to* flavor and health. The only remaining upshot is speed/ convenience. How fast & convenient is McDonalds, though? It's a gamble based on the specific restaurant's management and conditions at the time of arrival, such as who is ahead of you in line. This might help to explain why "fast-casual" restaurants' (i.e., Chipotle) profits were on the increase as of January (http://www.economist.com/news/business/21638120-why-slightly-more-upmarket-outlets-are-eating-fast-foods-lunch-better-burgers-choicer-chicken), as customers reason that McDonalds' price & convenience are no better than at yuppie establishments such as Moes.

There's another aspect that I think needs consideration here - the ascendance of fast food items as mid-tier and even higher end chain restaurant menu items as main meal offering for typical entertainment dining establishment. I.e. when I was a kid (Gen X born in the early 70's) I remember burgers and fries as only available at fast food joints, coffee houses/diners and as the kids menu at most other mid-tier restaurants.

In other words, I think many of the adults who grew up with McD's, BK & Wendy's as their go to fast food choice, are now the generation that considers burgers and fries a formal meal choice for a "dining experience." I don't know how it may directly relate to the drop in fast food popularity, but I'm sure it does play a variable in this equation.

"the ascendance of fast food items as mid-tier and even higher end chain restaurant"

In the dieverse mid-Atlantic, legacy lower end fast good chains (McD, BK, even Wendy's) are staffed by blacks or Mestizos, or a combination of the two. White teenagers gravitate to the slightly higher end new chains, and it seems that, in a chicken vs egg manner, the White customers go there too.

Exception: Chic Fila is still mostly White staffed. With Sundays off, they get a leg up on quality applicants, I surmise.

With TGIF & Co., it's more a matter of man-child tastes among the customer base. Baby Boomers had burgers and shakes as children, but didn't insist on upscaled versions of them when they were in their 20s and 30s (the '70s and '80s). They graduated to fine dining, steak houses, and other kinds of adult-oriented restaurants.

A customer base that still plays video games after middle or high school is going to re-shape the menu of sit-down restaurants so that their kiddie favs are given a foodie kick. Tater tots, but made from sweet potatoes and served with bacon and blue cheese. Nachos and cheese, but the chips are made from exotic corn and the cheese is a blend of three types.

Once again, good ol' Wendy's has always eschewed this thinly disguised kiddie menu, and does not have a reputation for being gimmicky frat bro chow. Instead of tater tots, they've always sold baked potatoes, a staple from a steak house menu. (McDonald's and Burger King have never sold such a thing.) They serve it with the same toppings you find on foodie tater tots, and both items are primarily potato starch. One is grown-up and the other is juvenile, though, and that makes all the difference.

It's strange to think of how quickly potato skins have come and gone, as an intermediate stage between the unpretentious baked potato and the striver take on tater tots. TGIF began serving them in 1974, and they lasted well into the '90s. But once Gen X and Millennial lifestyle strivers made up most of the casual dining market, potato skins felt creepily similar to the old-fashioned baked potato. Trendy tots to the rescue!

The only thing at McDonalds and Burger King that ever held any appeal to me was the dollar menu. If I'm going to spend 7-8 dollars on a meal, I'd rather go to the specialty sandwich shop, Greek deli, All-you can eat Pizza Buffet or Pho Restaurant. There's just too many choices for that price range.

I've heard that McDonalds has a lot of SJWs on staff. They're pretty much the kiss of death for any organization...

Sometimes a blogger will post a pair of photos contrasting a wholesome past against a degenerate present. But one of the things that's nearly impossible to do a Then vs Now comparison on is the taste of perishable food.

Did sodas, ice cream, fast food, all food taste better a few decades ago before the corn syrup, cost-cutting on ingredients, and GMOs?

“Another sign of the juvenile baggage of the big two are their kiddie nicknames, which have been widespread for a long time -- Mickey D's and BK.”

I understood that to be a black thing, not a kiddie thing. Or maybe a black-kiddie thing. The beverage Sunny Delight became “Sunny-D” first informally on their commercial with negro-imitating white kids. Then it became the official brand name. Same with Kentucky Fried Chicken which became KFC (also to get the “fried” out of the name). The black kids in high school called my friend (who shook funny when he ran track) “shakey-D” before there was a “Sunny-D.”

I remember an early “I’m loving it” McDonald’s commercial. A girl (Hispanic I think) pranked one of the guys by standing outside the restaurant and karate kicking him as he exited with his buddies, spilling his milkshake all over him. My reaction was “WTF! That supposed to make me want to go there – some chick kicks my shake all over me!”

The best fast food advertising, hands down, is Jack Box. Very clever. But that doesn't mean I'd ever eat there. I got sick on one of their chicken sandwiches in San Francisco in 1982, and haven't eaten fast food of any brand since. For about two years I bought coffee at McD's. Kids 3-8 go absolutely crazy for their toys. If I were a pro psychologist I'd hang around just to study that level of joy. The store I went to, NorCal, had a mexican and filipino staff. No black workers, despite a fairly heavy black population. This is probably good evidence that black grandmas are making so much money between govjobs and welfare that their grandkids don't need to work. I told the mexican manager, nice guy, thatif he kept playing that rap tape I wasn't coming in anymore. He shined me on, so I haven't had a cup of coffee in three months.

"Did sodas, ice cream, fast food, all food taste better a few decades ago before the corn syrup, cost-cutting on ingredients, and GMOs?"

McDonald's used to fry their fries in beef tallow (93%, 7% some vegetable oil). The fat that the fries are cooked in is what gives them their taste -- potatoes don't taste like much by themselves. Circa 1990, they switched to vegetable oils that are high in polyunsaturated fats that oxidize easily.

They were lobbied by the Center for Science in the Public Interest, a vegetarian propaganda group, but it would be unfair to blame only them. The Boomer target market was well into overdrive on fat-phobia and especially avoidance of animal fats. Cost-cutting must have played a role too, since animal fat is much more expensive than cottonseed oil or whatever.

I don't remember exactly what they tasted like, but I do remember them going downhill all of a sudden at some point in the '90s. They were no longer fried in beef fat.

But now that Gen X and Millennials are the target market, and they don't fear animal fats or fats in general, we may see a comeback of fries that are cooked in beef fat, lard, etc. Probably only in a more upscale place, though.

Supernaut almost touched on what I think the cause is: the greater number of fast food options available now. I'm a gen Xer born in '74, and my recollection of the early to mid '80s, at least in my small town, is one of much fewer fast food chains. McDonald's, Burger King, KFC, and Sonic were the only commonly seen chains in this region. My town also had a Wendy's, and I can remember when Subway and Taco Bell showed up in the very early 80's. There were also more local places, like the ubiquitous "Dairy Shacks", to get a burger. Since I was a kid, I usually had to go where the adults wanted to go. Often, this meant where my grandparents wanted to go. If we were in a hurry, say before a basketball game, this usually meant McDonalds or Burger King. My grandfather seemed particularly fond of Burger King. But, these were rare occasions, usually no more than twice a month. Fast food seemed less common back then, more of a treat, and limited to mostly burgers and fried chicken, because that was what was "safe", or familiar, particularly for my grandparents, who weren't adventurous eaters. An older gen Xer covers this better than I can here: http://www.retrospace.org/2010/12/family-dinner-table-rip.html

Now, it seems like the fast food options are almost overwhelming, with much greater options than just burgers and fries (I can think of at least 3 chains that specialize in just fried chicken strips). And honestly, if I'm wanting a burger, I'm going to 5 Guys, or David's Burgers (these may be more regional chains). The service is almost as fast, and I can truly "get it my way" for only a few dollars more. It seems to me that, where once McDonalds and Burger King were the only options for getting a fast meal, now they're just one of many choices, at least in more populated areas, and they aren't necessarily the best in their particular niche.

The proliferation of fast food / fast casual places wouldn't have to lead to the decline of McDonald's and Burger King. They could all have expanded in order to serve the exploding demand for food outside the home. Instead they had something that was outta-whack with the new demand, namely kiddie-ness.

The main point here is that Wendy's has not only survived but thrived in the new foodie environment, despite being one of the original big three that had been around since the '70s. Proliferating alternatives didn't sink its long rise.

All day breakfast is helping McDonald's -- same store sales are back up in the U.S. and in China. You don't talk about breakfast at all in this post -- McDonald's practically invented the fast food breakfast sandwich.

I'll always be loyal to McDonald's -- I had my first summer job there and ever since I've liked their food. I will say, though, that if I want a good burger now there are many different fast casual options to choose from (Five Guys, Shake Shack, Epic Burger, etc.)

In the United States, comparable [same-store] sales rose 0.9 percent, its first increase in two years

In other words, still in the gutter. That is the quarterly estimate, and the all-day breakfast had only been in effect for two weeks. No way that gave sales a boost.

If anything, the all-day breakfast seems to have no effect up or down on sales. Interviews with franchisees give the impression that customers are spending about the same amount, but substituting breakfast items for lunch/dinner items, and that traffic hasn't shot up, again suggesting that it's the same group of customers ordering a different kind of item, not lunch customers plus additional breakfast-seeking customers.

The franchisees say it's been a major headache and screwing up day-to-day operations to have breakfast running full-time alongside lunch/dinner.

The corporate heads say that they're only responding to the most popular request from customers. But they mistakenly thought offering breakfast all day would bring in people who wouldn't show up if there were only lunch/dinner being served. Nope: it's the same people, just ordering a different kind of item, spending the same amount they would've forked over for lunch/dinner fare.

Lesson: offering breakfast is associated with failing chains in the foodie era. Ordering breakfast at a fast food place is way too utilitarian, convenient, and prole. You can't savor the meal, but must eat it in the car on the way to work -- not exactly a model for conspicuous leisure that the foodie public desires.

Gen X-ers and Millennials will only reduce themselves to pulling into a Starbucks drive-thru for a shot in the arm in the morning. You can extend your coffee consumption over several hours if you want, and wait until you get to work to start drinking it. You don't have to gulp it down on-the-go like a utilitarian caffeine hit.

Until we all start work at 10am, freeing up a chunk of time early in the morning to indulge in foodie striving in public, eating out for breakfast will always carry the baggage of rushed convenience rather than leisurely decadence.

Prediction: the only way Wendy's could make early-morning food work would be offering brunch on the weekend.

The downside would be in publicity -- if it's totally new, they'd need to publicize it like crazy. But would customers really pay attention once they hear that it's only being offered on the weekend? Who knows, but probably not.

If it had been a traditional thing, so that for decades everyone expected Wendy's brunch on the weekend, they could've shaped the menu in a foodie-friendly direction.

There may be some ad genius who could make it work, though. Having an egg and bacon panini would not be a daily convenience, but an indulgence you can only squeeze into your morning-afternoon on the weekend. Make sure to layer it with self-aware striver dialog.

Underemployed libarts Millenial: OK you guys, how amazing is this? We get to have weekend brunch -- at Wendy's.

The only way to see if it would draw in more sales to offset the cost of rolling it out would be trial-and-error. But if they make breakfast food work, it would have to be something like weekend brunch (alongside the regular menu, just with limited brunch hours).

I sort of think along the same lines as Big D. McDs *may* be getting damaged by being seen to not be foodie friendly... on the other hand, all the cheap junk food no-brand fried chicken shops seem to be doing fine (booming even), so I don't know how much there is shift is that major towards a "foodie" sort of norm that totally supplants everything else. Agree that agnostic is probably right that it's hard for McDs to shift their product, but it may be more about having to serve their existing base of customers than this sort of imagery and association stuff which may be fairly malleable and follows the customer base (marketeers creating image is definitely marketing bs).

Millennials, I know who eat McDonalds do tend to eat it occasionally as sort of a post-club, drunk calorie load deal, usually on vouchers because the price:quality and enjoyment:calories just seems pretty bad compared to anything else in today's market (except maybe Subway) during normal working hours. I've met a few guys who treat it like a post-gym calorie load as well though.

There's no Wendy's equivalent (fairly quality hamburgers) in the UK as a single franchise, outside central London, I don't think. That base of better quality than McDs burgers is spread out into the very popular gastropubs and chain pubs.

Burgers seem to be not so popular as a lunch or dinner staple, compared with cold sandwiches, wraps, proper meals, pseudo-Eat Clean stuff, etc. among the Millennials I know, but they still have fond memories of them, so often want a high quality and healthy burger when they have one and it becomes more of an "event" or occasion food.

I haven't really noticed so much that my parents or people of their age are either more or less nostalgic for foods they used to eat as children, nor less keen to eat them as adults (fish and chips, various dull and bland kinds of stews and pies etc.). Although certainly, like agnostic says, I don't think they really had as much of a concept of specific foods for children as much, in the 1950s, the way Generation X and Millennials did growing up. They're very keen on sweets and biscuits and crisps though. Neither did they really have burgers or McDonalds here though until quite a lot later. People eat less beef than the US, and of that more in pies and roasts, and burgers and hot sandwiches are less popular generally, I think.

Probably off topic, but interesting that virtually all celebrity chefs under a Google search for the term (as opposed to richest chefs though) are Generation X. A contrast to relatively lower influence among famous directors, compared to Boomers, and how the iconically famous writers in the culture tend to be from Missionary - Silent Generations (few earlier, even fewer later). And the Boomer celebrity chefs tend to be pictured wearing chef's whites, not casual clothes, in their picture (probably a barometer of whether they are really properly a real chef, legitimate professionals) or are obviously actually celebrity bon vivants like Keith Floyd, and not chefs. I've read a few Generation X chefs claim that they learned to cook due to poor childhood nutrition (parents who can't cook, won't cook) although I doubt that's any kind of real explanation. Instead it's clearly something which happened in the general "Anglosphere" culture that the Boomer generation were either too uninterested or late to get in on.

Mcdonald's was probably responding to people complaining that they should serve breakfast longer - a better idea would have been to push it back to 11:30 or noon(while serving lunch at the same time).

Strangely, the commercials they showed had kids texting each other and bragging about eating an Egg McMuffin in the middle of the night. Maybe that is a sign that it was a misguided attempt to lure the lifestyle strivers.

Now can they keep this up? We will see, but as the article says, McDonald's has been improving all year so this could be the beginning of strong earnings growth and continued sales/revenue growth for some time.

You'll have to do another post at the beginning of the new year!

2) I like how you say "Ordering breakfast at a fast food place is way too utilitarian, convenient, and prole." To me, these are good things! Sometimes I want convenience and utility and could care less of the hoi polloi look down on me. I think this is true for many McDonald's customers and I suspect there are more of us than striving, wanna be Millennials.